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TM, ®, Copyright © 2021 Piero Scaruffi All rights reserved.

TM, ®, Copyright © 2021 Piero Scaruffi All rights reserved.

Nations in Crisis: Venezuela
Articles on Venezuela before 2021

  • (july 2021/ december 2022) Nations in Crisis: Venezuela
    (Part of a series on "Nations in Crisis")

    It's been eight years since Venezuelan president Hugo Chavez died of cancer and was succeeded by his vicepresident Nicolas Maduro. Deprived of Chavez's charisma (he was in a sense Trump before Trump), the Venezuelan "revolution" was left with only the economic devastation. Venezuela, once the wealthiest country in South America thanks to its oil reserves, which are considered the largest in the world, is now one of the poorest of the hemisphere. To be fair, oil prices collapsed in 2014, just after Maduro took over, so Maduro never had the bonanza that Chavez had to spend on all sorts of welfare programs. On the contrary, he had to pay the bills. Inflation skyrocketed. In 2018 Venezuela began printing a 1 million-bolivar note. Today one US dollar is worth 3,219,000 bolivars. At the end of 2015 the opposition won parliamentary elections after 16 years of socialist control of the parliament. Hyperinflation, hunger, crime and diseases have become endemic. About 5 million people have fled Venezuela between 2014 and 2020, the largest exodus ever in Latin America. Venezuela's capital Caracas doesn't have gasoline and is once again rationing it. Being bankrupt, the Maduro regime wants access to about $2 billion of gold deposited by Venezuela at the Bank of Engand, but Juan Guaido claims that his shadow government is the legitimate owner of that gold, and the British government would prefer to give it to him (the legal battle between Guaido and Maduro is underway). Maduro is also trying to triple oil production to 1.5 million barrels a day but has to work around US sanctions that make it difficult to repair broken equipment and to acquire crucial chemicals.
    Maduro claimed victory in the 2018 presidential elections, but most observers objected. In January 2019, following mass protests against the Maduro regime, opposition leader Juan Guaido declared himself interim president and was recognized by the USA, Canada, several European countries, the Organization of American States and most Latin American governments; but Maduro never surrendered power. At one point Trump was talking as if the USA was ready to intervene militarily but all it took was a statement by Putin that Russia supported Maduro and Trump never mentioned Venezuela again. Putin even sent two TU-160 bombers in December 2018. The US sanctions have crippled Venezuela's economy but China and Russia are keeping the regime alive. Russia has loaned money to Maduro's regime for the purchase of Russian fighter jets and missiles, and for joint oil exploration. Despite the US sanctions, Venezuela has been able to export oil via companies like China Concord Petroleum Co (CCPC) and Chinese refineries. Venezuela owes china about $20 billion.
    Venezuela is now threatened by organized crime at several levels of society. The Center for Strategic and International Studies wrote that Venezuela is a mafia state. Corruption was already rampant under Chavez but not necessarily tied to the regime. For example, Ferrominera's president Radwan Sabbagh was sentenced to prison after confessing that he helped to steal US$1.8 million between 2006 and 2013. However, corruption became a way of life in Maduro's regime. In February 2017 the USA accused Maduro's vicepresident Tareck El Aissami of being a drug trafficker connected with the Mexican drug cartel Los Zetas . In March 2018 Brazilian investigators discovered that Maduro in person was involved in the Odebrecht scandal. In November 2018 Alejandro Andrade, a former associated of Hugo Chavez, was sentenced to jail in the USA for money-laundering and bribes that made him a billionaire. Alex Saab, a Colombian businessman linked to Maduro, is wanted by the USA. In June 2020 Saab has been detained in Cape Verde when his private jet stopped there en route from Venezuela to Iran, and is now awaiting extradiction to the USA. The USA alleges that Saab has been involved in bribery, money laundering, and corruption, all of it in cahoots with Maduro's regime. Between 2004 and 2014 it is estimated that $11 billion went missing from Venezuela's national oil company, Petroleos de Venezuela. Besides this high-level mafia, there are also local gangs that have taken control of entire neighborhoods. Colombia's president Ivan Duque also claims that Venezuela is harboring the terrorist group that tried to assassinate him in June 2021, a splinter group of the former FARC guerrillas.
    The anti-regime protests in Cuba of July 2021 and the apparent desperation of Daniel Ortega in Nicaragua (he has arrested seven opposition politicians for treason ahead of November's elections) mean that Maduro's only friends in Latin America have their own problems. The man is more isolated than ever, but he is the perfect pawn for Russia's and China's geopolitical games.

    December 2022 addition:

    Venezuela's food price inflation has reached 158%, the third highest in the world, and seven million refugees and migrants from Venezuela have scattered around the world, but Maduro seems comfortably in power. He has started negotiations with the oppositions so that the USA started to lift sanctions on Venezuela, possibly because it needs Venezuela's oil to counter Russia's oil (Venezuela sits on 20% of the world’s oil reserves). In November 2022 the Biden administration granted Chevron permission to expand production in Venezuela (despite the nominal US sanctions on the Maduro regime). Now that Luiz Inacio Lula has won the elections in Brazil, almost all of South America is run by left-wing governments that are likely to be less hostile to Maduro than previous governments (Andres Lopez-Obrador in Mexico, Gustavo Petro in Colombia, Pedro Castillo in Peru, Luis Arce in Bolivia, Alberto Fernandez in Argentina, Gabriel Boric in Chile, and Lula in Brazil). In October 2023 Venezuela's president Maduro released five political prisoners and agreed on free elections, another step in the direction of normalizing relations with the USA.

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